What impact will the Coronation have on the UK economy - and how have things changed since 1953?

With consumer prices starting to show signs of easing, and inflation forecasted to have passed its peak, PwC UK’s economists look at whether the coronation weekend of King Charles III will have any bearing on the UK economy. 

The UK and international economy compared to 1953 (when Queen Elizabeth II was crowned)

The UK and international economies look very different today compared to Queen Elizabeth II’s coronation in June 1953. Average weekly earnings were in the region of around £6, compared to around £630 based on the latest data for this year. 

In addition, during the last coronation, UK GDP per capita was the third highest amongst the G7, standing at around 11,000 US Dollars in 2017 prices. Since then, rapid advances in productivity aided by a healthier, better educated and more globally integrated workforce led to per capita UK GDP growing to a pre-pandemic level of around 44,000 US Dollars.

“In terms of the overall size of the economy this makes it the third fastest period of economic growth in any previous monarch's reign since the political union between England and Scotland in 1707,” said Barret Kupelian, senior economist at PwC.

_{Note: The reign of King Edward VIII is omitted due to its short duration. Included is the year of coronation and death of each monarch as part of our overall calculation for average real GDP growth.
Sources: PwC analysis of Bank of England and ONS data}

In relative terms, however, this performance appears less impressive as the post-war reconstruction of Europe, and intense global competition has meant that the G7 European economies rapidly reduced their gap with UK GDP per capita - with Germany even over-taking the UK.

_{Note: This data is presented in thousands of international $ at 2017 prices and has been rounded.} 
Source: Penn World Tables, PwC analysis

PwC analysis of the likely economic impact of the King’s Coronation

Empirical evidence shows that, on aggregate, economic activity dips in the month when additional bank holidays occur - between 0.7% and 2% during the month in which the bank holiday falls relative to the previous month. In line with historic trends, GDP for the month of May is likely to fall, but the additional bank holiday should not have a significant bearing on this. 

Although the drag to economic activity from reduced working hours could offset the impact of additional spending on the day of the bank holiday, we should see grocery spend rise as people celebrate with friends and family - a welcome boost to retail and consumer markets, sectors which have been hard hit during the cost of living crisis. The King’s coronation will also provide a welcome boost to inbound tourists and associated spend, outbound tourism for in-term holidays, and pub, restaurant and leisure activity.